THE COEGA DEVELOPMENT CORPORATION

T H E C O E G A D E V E LO P M E N T C O R P O R AT I O N

South Africa’s leading investment destination continues to thrive

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Right Place, Right Time

RIGHT CHOICE The Coega Industrial Development Zone is a flagship contributor to South Africa’s economic future, with the Coega Development Corporation sustainably driving its ongoing prominence Writer: Matthew Staff | Project Manager: Kane Weller ince 1999, The Coega Development Corporation (CDC) has fulfilled - beyond expectations - its mandate to develop the 11,500 hectare Coega Industrial Development Zone (IDZ) in South Africa.

Located adjacent to the modern deepwater port facility, the Port of Ngqura, the Coega IDZ is South Africa’s foremost investment hotspot and preferred location for industries with a global outlook on the continent. And the state-owned CDC has leveraged this ambition to improve the lives of millions of local people through the IDZ projects and the delivery of infrastructure programmes in the Eastern Cape and the rest of the country.

Addressing key parameters including skills shortages, unemployment, constrained planning, project management capacity, and underexpenditure; the IDZ has gone from strength to strength since its inception as its vision to be the leading catalyst

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for the championing of socio-economic growth gathers momentum.

“In line with this, the CDC has positioned the Eastern Cape as a preferred investment destination, demarcated into 14 zones - more than 6,443 hectares of prime lettable land - with a focus on the following

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Africa ment destinations in benchmark for invest Coega IDZ has set the

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sectors: metals; automotive; business process outsourcing; chemicals; agroprocessing; logistics; trade solutions and training & development; energy; and maritime,” the Head of Strategic Marketing, Brand and Corporate Communications for CDC, Dr. Ayanda Vilakazi notes. “The Coega IDZ has set the benchmark for investment destinations in Africa, achieving nearimpossible results; becoming the first industrial development zone to attract double digit investment in one FY -

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2013/14 - signing no less than 10 new investors in that year.

“The IDZ attracted eight new investors in the previous year. This was subsequently followed by an additional 19 new investors signed in the FY 2014/15, and 17 new investors in the FY 2015/16, an indication of high investor confidence in the Coega IDZ.” In total, the Coega IDZ has attracted an impressive 61 new investments, to the tune of R35.8 billion over the past five years; indicative of the Company’s

vision to deliver on its mandate to change the lives of the country’s communities. Many progressive and successful IDZs in Africa, arguably in the developing countries as well, have not achieved the same levels of success as have been demonstrated by the Coega IDZ, over such a short period of time.

The best of them all

As a consequence of its various projects in the IDZ and virtue

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of Infrastructure Development Programmes, the CDC has created a total of more than 83,405 jobs over the past eight years alone, and 96,776 since inception compounded by training opportunities being provided to more than 91,772 citizens.

“I’ve been to many developing countries and industrial development zones in the world [and] the Coega IDZ is by far the best of them all,” said Dr LI Yuanchao, Vice President of the People’s Republic of China in November, 2016.

Sakhumzi Somyo, MEC for Economic Development, Environmental Affairs, and Tourism added: “The Coega IDZ is the best performing and has done very well to win national awards in South Africa; we are very proud of this institution.”

At present the CDC has increased its operational investors in the IDZ from 36 in the previous financial year 2015/16 to 41, including those

I’ve been to many developing countries and industrial development zones in the world [and] the Coega IDZ is by far the best of them all

Dedisa Peaking Plant – a company prominent among the IDZ’s 36 investors

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located in the Nelson Mandela Bay Logistics Park who are direct suppliers to Volkswagen South Africa as an example of the kinds of high profile enterprises benefitting from the Zone (18 international companies and 23 home-grown companies are found in the Coega IDZ).

Across the 41, an estimated R7 billion has been invested; other notable contributors including Coega Dairy & Cheese, PE Cold Storage, Dedisa Power Peaking Station, FAW, Dynamic Commodities, Famous Brands, Discovery, WNS, and General Motors Pan African Distribution Centre.

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including establishing its own one-stopshop portal, to increase the number of investments, create job opportunities, training and development, and SMME support and development.”

“Coega is a flagship programme we are very proud of. It’s effectively the best functioning and most successful IDZ in the country and also has worldclass management and corporate governance systems,” echoed Lionel October, Director General of the Department of Trade and Industry in December, 2016.

More and more global investors find the Coega IDZ as the right place and right choice for their investment as the organisation provides benefits to investors in the IDZ, which includes, amongst others, a range of incentives, such as customs duties and VAT suspension; CCA incentives for those enterprises located in Zone 1 & 2 of the Coega IDZ; specific SEZ Incentives for qualifying tenants, which includes a 15 percent corporate tax benefit, Coega’s success stems from an alignment with the Industrial Policy Action Plan building allowance, employment creation incentive, 12i Tax Allowance (the incentive offers support based on capital investment and training), training allowance, sector focused Coega is a flagship programme we are very proud incentives, to name but a few; easy access to road, rail, air & sea network of. It’s effectively the best functioning and most and adjacent to the deepwater port of successful IDZ in the country Ngqura; integrated logistics services, connecting emerging markets in Africa and the rest of the world markets; and one stop shop services, proving VISA/ work and study permits.

Dr Vilakazi adds: “Furthermore, “The success of the Coega IDZ stems since its establishment, year-in and mainly from an alignment with the year-out, the CDC has obtained an Industrial Policy Action Plan, Special unqualified audit opinion from the Economic Zones Incentives, Sector Auditor General of South Africa, Specific Incentives, and Municipality a welcomed milestone given the Incentives and Support; all of whom size of the operations. CDC has also are aimed, amongst others, at achieved ISO certifications which boosting the targeted economic are important for global investment sectors and promoting investment in promotion; and these include ISO the country,” Dr Vilakazi emphasises.

9 001 (Quality Management), ISO “As a result, the Coega IDZ has taken 14 001(Environmental Management), full advantage of these support The Company achieved ISO certifications ISO 15 498 (Records Management), mechanisms from Government,

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SANS 16 001 (HIV & AIDS), OHSAS 18 001(Occupation Health & Safety), ISO 20 000 (IT Service Management), ISO 27 000 (Information Management), and ISO 31 000 (Risk Management).”

Significant milestone

The CDC has contributed enormously to the roll-out of economical and infrastructural developments in South Africa during its tenure, addressing most prominently the issues which will affect the country’s sustainable future; namely, energy and logistics.

“The CDC, in line with the National Development Plan (NDP) and IPAP Gas-based industrialisation plans, is leveraging natural gas as both a source of power generation and a driver of industrial diversification, as one of the cornerstones of the country’s industrial strategy,” Dr Vilakazi offers as an example. “In the process of diversification to include clean energy in the mix, in this instance through

The Company leverages natural gas as a driver of industrial diversification

wind energy, the Coega IDZ provides a platform to localise the manufacturing of industrial components.

“In so doing, the organisation has been key to affecting the structural changes in the economy through breaking out of commodity dependence and moving towards a diversified, knowledge economy in which increasing value-addition and export intensity is paramount.”

Projects such as the DCD Wind Tower factory, the gas-to-power programme and numerous power plant developments affirm this influence on the sector; culminating in arguably its most significant milestone to date earlier this year.

“A significant milestone for the CDC is its recent agreement with Eskom to cooperate in the development of South Africa’s nuclear new build programme (NNBP). The agreement was signed on Tuesday 14 March, 2017 whereby the two state-owned

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Landmark projects continue

Companies (SoC) will work together in support of Government’s plans to build local capacity through supplier development and localisation around the unfolding infrastructure for the nuclear programme,” Dr Vilakazi explains.

Eskom’s Group Executive for Group Capital, Abram Masango added: “We are gearing ourselves up in preparation for the nuclear new build programme in order to deliver the project within the set timelines and budget. We want to ensure that South Africans get reliable, decarbonised base load power that will bring sustainable economic growth.

“In addition, it is critical to lay the foundation for local people to participate meaningfully during the various stages of the project by skilling them for jobs as well as business opportunities.”

The landmark projects continue in the form of another historical project, the R11 billion investment signed by the CDC with the Beijing Automobile International Corporation (BAIC), the biggest automotive investment in Africa in the past 40 years.

Dr Vilakazi recalls: “The investment was described by the Minister of Trade and Industry, Dr Rob Davies, as significant and it deepens our

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Science students of JHB

economic relationship with China.

The investment is strategic and is a major project in terms of SA’s bilateral relationship with China and is a key project supported by the Inter Ministerial Committee on Investment.”

Promoting development

As of the end of March, 2017 the following investor facilities and/or plants are currently under construction in the Coega IDZ: the Beijing

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Automobile International Corporation, Dynamic Commodities, General Warehouse, Q-Plas, Redisa, Corromaster, and Lension.

Yet, outside of these core headlinemaking initiatives, the CDC is also ensuring much wider communitydriven sustainability, in line with its corporate social responsibility ethos.

“The CDC, together with its investors in the IDZ, is making inroads in promoting the development

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Driver Training Programme

of communities in areas where it operates,” Dr Vilakazi affirms. “Among the notable community projects are the Driver Training Programme, Skills Development Programme, Internship Programme and Maths and Science Programme.

“In this regard, the CDC recently signed an agreement with the Centre for the Built Environment (CBE) to collaborate on the Maths and Science Programme to increase the number of students who failed mathematics and physical science (and those wishing to improve their results) from 50 to 90 per annum.

Once again looking forward, the CDC is on track to achieving its fiveyear sustainable growth strategy (SGS) 2020, which mainly focuses on long-term financial and sustainable development.

The recent appointment of Pepi

Silinga will advise the Gauteng Provincial Government on the roll-out of social and economic infrastructure projects planned for the next two years

CDC is on track for sustainability

Silinga, Coega CEO, to the 14-member Gauteng Premier’s Economic Advisory Panel is being seen as significant for both the CDC and the IDZ moving forward; especially given the CEO’s expertise in mega-infrastructure programmes.

“Silinga will advise the Gauteng Provincial Government on the roll-out of social and economic infrastructure projects planned for the next two years,” Dr Vilakazi concludes. “The CDC has no doubt that he will ensure the economic and infrastructure plans of the Province are implemented with rigour and the required discipline of execution.”

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Coega Development Corporation Coega IDZ Business Centre Corner Alcyon Road & Zibuko Street Zone 1 Coega IDZ Port Elizabeth Tel: +27 41 403 0400 info@coega.co.za

www.coega.com

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